DeepSeek, the Chinese AI research company known for developing high‑performance, cost‑effective open‑source Large Language Models (LLMs) and chatbots, has reportedly been using Nvidia’s state‑of‑the‑art AI chips to train its upcoming V4 model. NVIDIA’s Blackwell chips, used by DeepSeek to train its V4 model, are currently banned from export to China. As per the latest reports, the V4 model is set to be rolled out as soon as next week, and the experts believe that the recent move from the Chinese AI company is nothing but a violation of U.S. export control regulations. A senior Trump administration official officially confirmed the news on Monday and claimed that U.S. officials believe DeepSeek may strip away technical markers that could reveal its reliance on American AI chips. They also added that DeepSeek’s data center in Inner Mongolia, an autonomous Chinese region, is believed to house clusters of Nvidia’s Blackwell chips.
Allegations of Data Distillation and Regulatory Silence
Following the news, the official showed his reluctance to say how the U.S. government received the information or how the AI research company gathered the latest chips. Despite the silence, he aligned with U.S. policy, affirming that Blackwell chips were not being shipped to China. The officials also alleged that DeepSeek allegedly leveraged Blackwell chips to distill outputs from American AI systems, including those developed by OpenAI, Anthropic, Google, and xAI. Reuters reported that Nvidia had declined to comment, while the United States Department of Commerce and DeepSeek had not responded to requests for comment. It further reported that the Chinese Embassy in Washington had said that Beijing opposed drawing ideological lines, overstretching the concept of national security, the expansive use of export controls, and the politicization of economic, trade, and technological issues.
The Debate Over U.S. Export Policy and National Security
The United States policy allowing Nvidia to export chips has drawn support from some experts, who believe the move could keep China reliant on foreign technology and reduce incentives for competitors like Huawei to accelerate their own innovation. Reuters reported that White House AI Czar David Sacks and Nvidia CEO Jensen Huang had argued that shipping advanced AI chips to China discouraged Chinese competitors such as Huawei from redoubling their efforts to catch up with the technology of Nvidia and AMD. Despite the competitive advantage, some fear that these chips could be easily used to enhance China’s military and threaten U.S. dominance in AI instead of being used for commercial purposes.
Experts Warn of Compliance Failures and Military Risks
Chris McGuire, the former White House National Security Council official under President Joe Biden, said that the situation showed why exporting any AI chips to China was so dangerous. He added that since China’s leading AI companies were brazenly violating U.S. export controls, the United States obviously could not expect them to comply with conditions that would prohibit the use of those chips to support the Chinese military.
“America First” Chip Restrictions Under the Trump Administration
Last November, President Donald Trump announced that Nvidia’s advanced Blackwell chips would be reserved exclusively for U.S. companies, with no plans to supply them abroad. Donald Trump said back in November that the most advanced chips would not be given to anybody other than the United States. He added that they did not give the Blackwell chip developed by Nvidia to other people.
Reports of Smuggling and “Phantom Data Centers”
Despite the lack of clarity surrounding AI chip shipments, some believe that reports from two months ago pointed to an alleged smuggling operation involving thousands of Nvidia Blackwell chips used to train DeepSeek’s next‑generation model. Following the reports back in December 2025, A spokesperson for Nvidia said in a statement that they had not seen any substantiation or received tips about so-called “phantom data centers” being constructed to deceive the company and its original equipment manufacturer partners, then deconstructed, smuggled, and reconstructed elsewhere. The spokesperson added that while such smuggling seemed far-fetched, Nvidia pursued any tip it received.
